Total utility can be determined by:

Total utility can be determined by:
 a. summing the marginal utilities of each unit of a good consumed.
 b. multiplying the marginal utility of the last unit consumed by the number of units consumed.
  c. multiplying the marginal utility of the first unit consumed by the number of units consumed.
  d. multiplying the price of the good times the number of units consumed.

QUESTION 2

If a resource has a perfectly elastic supply curve then its income is termed as:
 a. economic rent.
  b. rental rate of capital.
  c. rental income.
  d. annuity.
  e. transfer earnings.

QUESTION 3

Medicare subsidizes or provides health care to the poor and medicaid provides health care to the elderly.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 4

If the price of good A falls, it will:
 a. increase a consumer's total utility from the consumption of that good.
 b. increase a consumer's marginal utility from consuming the last unit of that good.
  c. decrease a consumer's marginal utility from consuming the last unit of that good.
  d. do both (a) and (c).

QUESTION 5

Earnings of a resource is termed as economic rent if:
 a. it has a perfectly elastic demand.
  b. it has a perfectly elastic supply.
  c. it has a perfectly inelastic supply.
  d. it has a perfectly inelastic demand.
  e. it has no demand.

QUESTION 6

The demand for health care is perfectly elastic.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 7

Diminishing marginal utility means that:
 a. marginal utility is maximized when consumers get the same amount of total utility from every good they consume.
  b. beyond some point, added units of a product provide lower and lower amounts of marginal utility.
 c. a consumer would get more utility from the last unit of a good consumed when that good costs 3 than when it costs 1.
  d. both (b) and (c) are true.

QUESTION 8

Which of the following statements brings out the relationship between the value of marginal product (VMP) and the marginal revenue product (MRP)?
 a. They are the same for a firm selling in a perfectly competitive market structure.
  b. They are the same for a firm purchasing inputs in a perfectly competitive market structure.
  c. VMP is greater than MRP when a firm is perfectly competitive in the product market.
  d. VMP is less than MRP when a firm is perfectly competitive in the product market.
  e. They are same when a firm is a monopolist.

QUESTION 9

Sellers are more willing to supply a good or service for which the profit is low than to supply a good or service for which the profit is high.
 a. True
  b. False
  Indicate whether the statement is true or false